“intensificationability” (© phil dobie) limits to
TRANSCRIPT
“INTENSIFICATIONABILITY”(© Phil Dobie)
Limits to agricultural development from a smallholder household perspective:
The profitability of rainfed crop production and how it affects the potential for
intensification.
Dave Harris
ICRISAT Nairobi
10th August 2012
Outline
1. Sustainable Intensification
2. Productivity versus Profitability
3. Relation between Profitability, Land and Household Per Capita Income
4. Profitability and Technology
5. “Intensificationability” – the potential for HHs to benefit from
intensification.
Sustainable Intensification (SI)
General consensus (CGIAR‐CRPs, USAID, etc) that this is the way forward for
rural households to:
Reduce poverty
Improve food security
However, SI is not rigorously defined and its potential and limits have not been
quantified.
Sustainable Intensification (SI)
Implicit understanding that it entails an increase in agricultural production
while minimizing/reversing damage to the environment, e.g.
“Provide pathways out of hunger and poverty for smallholder families through sustainably intensified farming systems that sufficiently improve food, nutrition, and income security, particularly for women and children, and conserve or enhance the natural resource base.”
(Program Purpose, USAID AfricaRISING, Feed the Future Program).
Is this the way things can be or the way they ought to be?
(Sustainable) Intensification (SI)
Some questions:
Ignoring sustainability for now, can rural households intensify their
agricultural enterprises by adopting improved technology?
Are there limits to how much they can intensify?
What are the consequences (impacts) of intensification for rural
households?
Productivity versus Profitability
We all concentrate on increasing the productivity of (rainfed)
crops, cropping systems, etc.
However, increased yields generally incur increased costs. It is the net
return (profitability) from investments (cash, labour, time, etc) that may be
important to a farming household and is likely to influence adoption of new
technologies.
Income for re‐investment in agriculture is also a requirement for
“(sustainable) intensification”.
Productivity versus Profitability
Net returns* are expressed on a ‘per hectare’ basis.
*‘net returns’ in this analysis include monetized benefits such as food consumed directly.
However, poverty levels are generally expressed on a per person, per day basis, e.g. the widely used threshold value of “$ 1 per person per day” (although other, potentially less achievable, thresholds are also used)
Profitability, Land and Household Per Capita Income
The amount of land required for any household to achieve a given value of income per person from crop production depends on: the profitability of any cropping enterprise and the number of people in the household.
To achieve $1 / person / day, the relationship is:
y = (365/x) * n
Where:
y = land required per HH (hectares)x = net returns from the enterprise ($ / ha / year)n = number of persons in the HH
0
5
10
15
20
25
30
35
40
45
50
0 50 100 150 200 250 300 350 400
Land per HH required to give $ 1 per person per day for a given net return (per hectare)from crop production, for various HH sizes.
(Note: one season per year)Land
per HH (h
ectares)
Net returns from crop production ($ per hectare per year)
1 person / HH
2 persons /HH
4 persons / HH
6 persons / HH
Relation holds for ANY crop, combination of crops or ANYland‐based enterprise.
Profitability and Technology
What are typical values for net returns from rainfed crop production?
i.e. how long is the x‐axis?
Profitability and Technology
Literature survey ‐ criteria for inclusion in the analysis:
1. Published since 2000.
2. Rainfed cropping – no irrigation.
3. Net returns (benefits minus variable costs) reported for entire enterprise.
4. Cost of labour (including family labour) included.
5. A comparison of a ‘base’ case (farmers’ current practice or an experimental control) and one or more improved technologies.
Including the following crops:Barley, blackgram, chickpea, cocoa, coffee, common bean, cotton, cowpea, fodder, groundnut, lentil, maize, mungbean, mustard, niger, pearl millet, peas, pineapple, rapeseed, rice, sesame, sorghum, soybean, sunflower, toria, vanilla, vetch, wheat, yam.
From the following countries:Burkina Faso, Benin, Cameroon, India, Kenya, Malawi, Niger, Nigeria, Sudan, Syria, Tanzania, Turkey, Uganda, Zambia, Zimbabwe.
Profitability and Technology
Sixty‐nine cases reported in the literature since 2000
And technologies:Tillage, rotations, fallows, intercropping, relay cropping, agroforestry, fertilizers, soil amendments, foliar sprays, pest‐ and disease control, new varieties, etc.
Effect of improved technology on rainfed crop profitability$ per hectare per season
From: Dave Harris and Alastair Orr (2012). Is Rainfed Agriculture Really a Pathway from Poverty? Agricultural Systems (submitted).
‐200
‐100
0
100
200
300
400
500
600
700
800
USD
/ha/season
Improved Current
Profitability and Technology
Median value for the ‘base’ case = $84 per hectare per season
Median value for the ‘improved’ case = $268 per hectare per season (220 % increase)
Median value for the B:C ratio of the improved technologies = 2.1
But, the range of net returns is narrow and there may be an upper limit around $700 per hectare per season.
80 % of farms in SSA are now below 2 ha (Nagayets, 2005).
“Intensificationability”
0
5
10
15
20
25
30
35
40
0 100 200 300 400 500 600 700
Land
per HH (h
ectares)
Net returns from crop production ($ per hectare per year)
HH=1
HH=4
HH=6
HH=15Ethiopia (6‐4 HH‐1 )
2.4 ha
$268/ha
Land per HH required to give $ 1 per person per day for a given net return ($268 ha‐1)from crop production, for various HH sizes and countries.
(Note: one season per year)
HH=2
HH=10
HH=20
Mali (20.3 HH‐1)13.3 ha
Nigeria (9.4 HH‐1)8.4 ha
Malawi (4.8 HH‐1)1.05 ha
“Intensificationability”
Hypothesis ‐ whether you can benefit significantly from intensification depends
on where you are:
determines what crops you can grow, how many cropping seasons per
year, what inputs you can access (and how much they cost) and what
prices you can get for them;
and what you have;
e.g., land, HH size, labor.
“Intensificationability”
Methods:
1. Household surveys (20 baseline surveys so far: CALESA project x 8;
CCAFS sites x 4; N2Africa sites x 8).
Only variables were farm size, household size and number of
cropping seasons per year.
2. Calculate % of HHs able to cross $1/person/day threshold as a result of
crop production for any given value of net returns/hectare.
‐10
0
10
20
30
40
50
60
70
80
0 100 200 300 400 500 600 700 800
HHs reaching
$1/pe
rson
/day (%
)*
Net returns ($/ha/season)
Limuru
Matopos
Makueni
Kaffrine
DRC
Kenya
Rwanda
Ghana
Nigeria
Malawi
Mozambique
Zimbabwe
“Intensificationability”
*Effect of seasons per year included
Site Makueni1
(Kenya)Limuru1
(Kenya)Matopos1
(Zimbabwe)Kaffrine2
(Senegal)HH size ‐mean 6.2 4.7 6.4 17.4
Farm size ‐mean 3.55 0.54 1.34 14.60
HHs with less than 2 ha (%) 39 99 81 0
Rainfall (mm/year) 611 854 567 593
No of seasons 2 2 1 1
1CALESA project baseline surveys2CCAFS baseline surveys
“Intensificationability”
0
10
20
30
40
50
60
70
80
0 200 400 600 800
HHs with $1/person/day (%
)
Net return ($/ha/season)
Response to increasing net returns ‐ four contrasting sites
Limuru
Matopos
Makueni
Kaffrine
Site Makueni Limuru Matopos KaffrineHH size ‐mean 6.2 4.7 6.4 17.4Farm size ‐mean 3.55 0.54 1.34 14.60HHs with less than 2 ha (%) 39 99 81 0Rainfall (mm/year) 611 854 567 593No of seasons 2 2 1 1
“Intensificationability”
0
10
20
30
40
50
60
70
80
0 100 200 300 400 500 600 700 800
HHs with $1
/person/da
y (%
)
Net return ($/ha/season)
Limuru
Matopos
Makueni
Kaffrine
sorghum/milletx = $176
maizex = $300
high valuex = $520
RISK?‐ Another elephant in the room?
Data on between‐year risk for net returns (as opposed to variability in yield) are very hard to come by – next step in this analysis ‐ but HHs’ perceived risk is likely to further influence adoption decisions.
Conclusions
With a range of technologies in a wide variety of crops and countries, agricultural research can substantially increase (by 220%) the net returns from rainfed crop production, from a median of $84 / ha / season to $268 / ha /season ( n = 69)
There seems to be an upper limit of net returns from rainfed crop production of around $700 / ha / season. High returns are generally associated with plantation crops in high potential areas (2‐3 seasons per year).
For any given level of return, HHs in areas where there are two‐ or three seasons per year can potentially gain more benefit from crop production than those in single‐season areas. Irrigation can facilitate additional cropping seasons in less favorable areas (and can allow use of higher value crops and increase net returns per hectare).
(Some) Implications
Given the limited range of profitability of rainfed cropping enterprises and the small farm sizes that are characteristic of resource‐poor farm households, absolute values of income will remain small for the majority of smallholders even if there is widespread adoption of improved technologies – i.e. intensification.
The potential for impact from agricultural intensification depends on HH characteristics as well as agro‐ecological potential and the conclusions can be counter‐intuitive. For instance, some communities in high potential areas will never be able to benefit much from agricultural intensification. This should be taken into account when targeting interventions.
The small net returns per HH from rainfed crop production on small farms should be taken into account when approaching HHs to adopt new technologies – other livelihood options may be more attractive, particularly when risk is factored in. Do not assume rural HHs are full‐time farmers.
Answers to common questions
1. US Dollar values do not reflect Purchasing Power Parity – comparative analysis is ongoing. On average, net returns likely to increase by around 30%
2. Poverty threshold of $1/day no longer commonly used ‐ $1.25 or even $2.
3. Family labor included to reflect opportunity costs.
4. All land‐based enterprises fit the model. Need to look in more detail at possible synergies/interactions, e.g. crop‐livestock, environmental services, difficult‐to‐value benefits.
Thank you!